Dive Brief:

• The automobile, toy, electronics, solar panel, fast fashion, ammunition and agriculture industries are the seven most likely to be affected by trade shifts in 2017, according to a recent Panjiva analysis.
• Of these, the automotive supply chain is the most likely to be affected due to its cross border integration, and will likely see the most impact from the incoming administration.  
• Five of six remaining are industries relying heavily on imports to the U.S., while agriculture — in the form of wheat and beef exports — will likely fall under existing trade tensions with China.

Dive Insight:

The Panjiva analysis reflects risk based on the upcoming administration's tariff and anti-trade deal proposals, placing the most globally integrated industries at risk.

Many of these industries have benefited from a long embrace of free trade that came under fire during the past presidential elections. Contrary to upcoming policy proposals, those engaged in trade believe that impeding it via tariffs and rejection of trade agreements does little to reduce costs or encourage an increase in local production. In fact, industries thought to have lost jobs as a result of cheap foreign labor, namely Detroit, had in fact begun its decline well before NAFTA, in the 1980s.

If the cost of doing business with the U.S. becomes prohibitive, it's uncertain what shortages will occur, or how much prices for imported goods will rise. For an America used to a "whatever you want, cheap!" marketplace, the change may not be welcome. 

At the same time, the upcoming administration provides an opportunity for deregulation that has many industries, including the ones mentioned by Panjiva, excited about potential opportunities. The automobile industry, for example, is lobbying to decrease emission standards that have already brought one carmaker to court. Under Armour's CEO, meanwhile, has stated the U.S. is right to pursue an America-first policy, as offshoring decisions are made through various cost-benefit analyses that may not be fully impacted by a shift in policy.

Regardless, one thing is clear: trade-reliant supply chains can expect changes under the next administration. Whether they will harm or help will depend both on the company and the severity of upcoming policies.